City of Madison goes after Majestic Theatre on marquee fees

Leslie (right) with Gerding by the encroaching marquee: "We're starting to feel a little rolled on."

Scott Leslie says what's happening to his business, the Majestic Theatre, is indicative of a larger problem: "If you want to know why Madison has a reputation for being unfair to business, look no further than this."

The city has filed a complaint against the Majestic, 115 King St., for encroaching into city space and refusing to agree to the city's payment demands. The matter is set for an initial appearance next Monday, Feb. 23, in Madison Municipal Court.

According to a summons from the city, the Majestic faces fines of $25 to $500 per day on each of two counts: Failure to sign an encroachment agreement and failure to pay an annual fee. The enforcement action also seeks "applicable costs including the penalty assessment, jail assessment, crime laboratories and drug law assessment, any applicable consumer information assessment, any applicable domestic abuse assessment, and court costs," among other possible costs.

We kid you not.

The former theater has been owned since June 2007 by an investment group called Majestic Building LLC. The Majestic business, a nightclub run out of the space, is co-owned by Leslie and Matt Gerding, two affable young guys who would pass for extras on Flight of the Conchords. Under the terms of their lease, they are responsible for taxes and fees.

The pair say they're willing to pay for an underground vault that encroaches onto city land. But they're balking at paying for the encroachment into city air space caused by their marquee sign, a designated historic landmark.

"We believe that historic structures should be exempt," says Leslie. "We don't have a choice whether to remove it."

Leslie and Gerding say their troubles began when they applied for a city building permit to do extensive renovations. Thus the encroachments became an issue, with the city asking the Majestic to pay an annual fee of about $1,300, according to the co-owners.

"It's disheartening to think that this is the thanks we get for rehabbing the theater," says Leslie. We're starting to feel a little rolled on."

Gerding agrees. "We felt blindsided," he says of the fee. "It was a surprise for us we didn't anticipate."

The encroachment fees are, of course, in addition to property taxes. The Majestic's latest tax bill topped $25,000, just $4,000 of which has been paid to date, meaning the business will incur late-payment penalties.

Leslie and Gerding say the none of the theater's previous owners paid an encroachment fee. They believe the fee was assessed only because they did what they were supposed to in getting a building permit. Asks Leslie, "How fair is that?"

Jerry Lund of the city's real estate office, which is pursuing the encroachment fee from the Majestic, did not respond to messages left for him and his program assistant. Matt Tucker, head of city zoning, says the issue of encroachments is Lund's bailiwick.

Katherine Noonan of the Madison City Attorney's Office, which is prosecuting the Majestic, did not promptly return a call. City Attorney Michael May says he's "not up to speed on anything involving the Majestic."